Putting shares of BetaShares Commodities Basket ETF-Curr Hgd (QCB.AX) at the forefront, let’s drill down into some key metrics.
ADX Momentum Focus
Taking a quick look at technical levels and trend lines, we see that the stock has a 14-day ADX of 10.62. For traders looking to capitalize on trends, the ADX may be an essential technical tool. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend.
Looking further at additional technical indicators we can see that the 14-day Commodity Channel Index (CCI) for BetaShares Commodities Basket ETF-Curr Hgd (QCB.AX) is sitting at -78.78. CCI is an indicator used in technical analysis that was designed by Donald Lambert. Although it was originally intended for commodity traders to help identify the start and finish of market trends, it is frequently used to analyze stocks as well. A CCI reading closer to +100 may indicate more buying (possibly overbought) and a reading closer to -100 may indicate more selling (possibly oversold).
Moving averages can help spot trends and price reversals. They may also be used to help find support or resistance levels. Moving averages are considered to be lagging indicators meaning that they confirm trends. A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. On the other side, a stock may be considered to be in a downtrend if trading below the moving average and sloping downward. Shares of BetaShares Commodities Basket ETF-Curr Hgd (QCB.AX) have a 7-day moving average of 9.10. Taking a glance at the relative strength indictor, we note that the 14-day RSI is currently at 48.39, the 7-day stands at 46.33, and the 3-day is sitting at 50.31.
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings.
With equity investing, there will constantly be worries and fears. The volatility in the market that accompanies these fears may trick investors into thinking the next bear market is on the doorstep. During a market-wide sell off, many stocks may experience the pain. Over time, many may gain back the ground they lost and return to previous levels. The biggest names may be the ones to recoup the losses the quickest. However, many investors might get stuck waiting for a rebound that just isn’t going to happen. Having the flexibility to adapt to market conditions may help repair a damaged portfolio. Sometimes a readjustment may be needed in order to regain some confidence. As the next round of earnings reports start to come in, investors will be keeping a close watch to see which companies produce the largest surprises, both positive and negative.